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Effective April 5, 2019, Vanguard Morgan Growth Option will be merged into the Vanguard U.S. Growth Option. The Morgan Growth Option is one of the individual investment options available in the Ohio Direct 529 Plan. It is also found in the underlying asset allocation in the Advantage Age-Based Portfolios (AABP), in each of the college-enrollment-date bands.
As a result, holdings in the Morgan Growth Fund will automatically become holdings of the U.S. Growth Fund and the Morgan Growth Option will be renamed the U.S. Growth Option. Contributions allocated to the Morgan Growth Option between April 1, 2019, and April 5, 2019, will be invested in an underlying holding of the U.S. Growth Fund by Vanguard’s Equity Index Group in alignment with the U.S. Growth Option's future strategy.
Following the merger of Morgan Growth Option into U.S. Growth Option, key elements will remain the same:
- The investment objective, which is to provide long-term capital appreciation; and
- The expense ratios of the U.S. Growth Option will be 0.43 percent, the same as the pre-merger expense ratios of the Morgan Growth Option.
The U.S. Growth Option will be subject to stock market risk, investment style risk, asset concentration risk, and manager risk.
For account owners who have elected to invest in the Morgan Growth Option, your funds will automatically be moved to the U.S. Growth Fund on April 5, 2019. This change requires no action on your part and will not be counted as one of your two yearly permissible exchanges as it’s being initiated by Ohio’s 529 Plan, CollegeAdvantage.
For account owners who are invested in an AABP college-enrollment-date fund, your portfolio will be updated to move the Morgan Growth Option into the U.S. Growth Option. This change requires no action on your part and will not be counted as one of your two yearly permissible exchanges as it’s being initiated by Ohio’s 529 Plan, CollegeAdvantage.
If you currently invest in the Morgan Growth Option as an individual investment option and choose to exchange out of Morgan Growth Option prior to April 5, 2019, this transfer will count as one of your two annual fund exchanges maximum limitation. Internal Revenue Code (IRC) Section 529 rules states that an investment option exchange is only allowed twice per calendar year, per beneficiary.
If you do not invest in Morgan Growth Option, this change will not impact your account and there is no action necessary.
These changes will be reflected effective April 5, 2019, in a Supplement to the Direct Plan Offering Statement And Participation Agreement Dated May 18, 2018. The new Supplement can be found on CollegeAdvantage.com.
If you have any questions or concerns about the upcoming changes, or if you need information or assistance with your account, please call CollegeAdvantage at 1-800-AFFORD-IT (233-6734). Our customer service representatives are available to assist you 8:30 a.m. - 6 p.m. ET Monday – Friday. You may also send your non-account specific questions at your convenience via email to CustomerService@CollegeAdvantage.com.
Posted on April 1, 2019